Tag: startups

In a part of the world better known for towering skyscrapers and oil than for its startup scene, Gulf Arab entrepreneurs might be seeing bright times ahead. That’s according to Fadi Ghandour, executive chairman of Wanda Group, whose venture capital fund invests in tech companies all over the Middle East and North Africa. Now that oil prices are dramatically down from their October highs, the veteran Middle East investor says the market moves “will definitely be a blessing in disguise” and in tha

In a part of the world better known for towering skyscrapers and oil than for its startup scene, Gulf Arab entrepreneurs might be seeing bright times ahead. That’s according to Fadi Ghandour, executive chairman of Wanda Group, whose venture capital fund invests in tech companies all over the Middle East and North Africa.

“For years we’ve said there is an inverse relationship between how change happens on the regulatory environment and the price of oil — the lower the price of oil, the faster the change process happens,” Ghandour told CNBC’s Hadley Gamble on Thursday, pointing to Arab Gulf countries like Saudi Arabia and the United Arab Emirates whose economies have historically been dependent on hydrocarbon revenues.

Now that oil prices are dramatically down from their October highs, the veteran Middle East investor says the market moves “will definitely be a blessing in disguise” and in that it will force the development of sustainable, knowledge-based economies and jobs. He believes that startups founded five or more years ago are now reaching their maturity stage, meaning there will be more businesses scaling up in the next several years — if they can get the necessary support.

“These companies born somewhere around 2011, 2012, have raised much more money, they are growing much faster, the region is adopting mobile smartphone technology much faster, they are interacting much faster and at a much larger scale, specifically in Saudi Arabia,” Ghandour said.

“This is the time when there is size, there is scale, and the big funds globally who don’t want to take the risk early on, are going to be looking for entry into a market that they don’t have much presence in.” He pointed to New York-based global equity firm General Atlantic’s investment of $120 million in Dubai-based website Property Finder last November. The Middle East real estate platform was founded in 2007 and has been profitable since 2013.

Investments in Middle East and North Africa (MENA)-based startups went up by 31 percent between 2017 and 2018 to $893 million, with 366 deals made, according to Magnitt, a regional data platform for investors. The database also found that more than 155 institutions invested in MENA startups in 2018, 30 percent of which were from outside the region and 47 percent of which had not previously invested in the region.

Companies like Airbnb, Uber, Lyft, Pinterest and Slack have all signaled their desire to do an initial public offering, or IPO, this year. The Securities and Exchange Commission is the agency charge of green-lighting the IPO process. “When the government does re-open, the SEC will have a backlog of applications,” according to PitchBook analyst Cameron Stanfill. Venture capital exits hit $120 billion — a 33 percent increase from 2017, largely thanks to IPOs and buyouts. The government shutdown co

This year may be a disappointing one for start-ups planning to go public. Those aiming to list in the first quarter are stuck in limbo, unable to start the application process until the government is fully re-opened.

Companies like Airbnb, Uber, Lyft, Pinterest and Slack have all signaled their desire to do an initial public offering, or IPO, this year. While those companies have attracted billion-dollar valuations through venture capital investments and big stakes by major investors like Softbank, smaller start-ups that are relying on a windfall from an IPO as their next source of funding likely can’t afford to wait.

Ryan Gilbert, general partner at Propel Venture Partners, said as the long-term effect of the partial government shutdown is starting to set in for Silicon Valley. The IPO calendar is looking empty for the first quarter and these delays are bound to have a “knock-on effect.”

“Smaller companies that aren’t able to access capital from the Softbanks, or the $100 billion funds of the world, need IPOs as the next stage of the fundraising process,” Gilbert told CNBC. “If they’re unable to access public markets, they’ll have to go back to existing financing and if an IPO is their only path, they may have to cut back operations.”

The Securities and Exchange Commission is the agency charge of green-lighting the IPO process. It and other key departments are closed as the shutdown entered its 21st day on Friday, tying a record for the longest lapse in funding. The fight for President Trump’s border wall raged on as about 800,000 federal employees were either furloughed or temporarily working without pay.

The SEC has staff “available to respond to emergency situations involving market integrity and investor protection, including law enforcement,” but most other functions are closed, the agency said on its website.

“When the government does re-open, the SEC will have a backlog of applications,” according to PitchBook analyst Cameron Stanfill. “That causes delays and could throw a wrench in some plans for those looking to file.”

Last year, the highest number of VC-backed companies entered the public markets since 2014, according to a report out this week from PitchBook and the National Venture Capital Association. Venture capital exits hit $120 billion — a 33 percent increase from 2017, largely thanks to IPOs and buyouts. The government shutdown could dampen that total for this year, according to the PitchBook report.

Walk inside Paris’ Station F — dubbed the world’s largest start-up campus — and you might notice how far the concept goes beyond start-ups: Amazon, Facebook and Microsoft are all among the global companies that have set up inside. CNBC recently visited the campus, which opened in 2017 and for which start-ups must apply through a variety of incubators and programs. Station F was backed by French telecom billionaire Xavier Niel, who poured $285 million into the project and was launched around the

Walk inside Paris’ Station F — dubbed the world’s largest start-up campus — and you might notice how far the concept goes beyond start-ups: Amazon, Facebook and Microsoft are all among the global companies that have set up inside.

That’s all part of its fabric and mission to connect corporates, organizations and universities to more than 1,000 start-ups working there.

CNBC recently visited the campus, which opened in 2017 and for which start-ups must apply through a variety of incubators and programs. And it’s not just a home for tech, either: The campus also includes the likes of L’Oreal, LVMH and BNP Paribas.

“They love being able to talk to people that have encountered the same difficulties, that have resources, that have contacts, so they’re really sharing with each other and I think that’s the main resource that you find here,” Roxanne Varza, the program director for Station F, said of the start-ups and entrepreneurs there.

Station F was backed by French telecom billionaire Xavier Niel, who poured $285 million into the project and was launched around the same time French President Emmanuel Macron took office. Macron has vowed to make France a “startup nation.”

At Station F, Benjamin Joffe, a partner at hardware accelerator HAX which is part of venture capital firm SOSV, praised France’s recent improvements in its available talent, government support and access to early-stage capital.

“France now has a lot of the elements necessary to actually create new companies,” he said.

But, while the aim of Station F is to put France on the international start-up map, Joffe also still sees potential barriers.

“What’s still missing in the ecosystem are things around skills for growth, maybe marketing skills as well, knowledge of international markets and the last thing that’s also missing, I think, in the environment, is the habits and knowledge around exits,” he added. “A lot of start-ups are being created, but really the proof comes when you have an exit.”

A new company called SportsCastr is allowing amateurs the chance to get behind the mic, broadcast games and offer their own sports commentary. Using a mobile phone, the SportsCastr app uses technology with green screens and graphics to give a professional broadcasting look and feel. Professional athletes like New York Giants Safety Landon Collins are using SportsCastr to prepare for a media career after his playing years. “So it took it took a lot of me to do that especially in front of like ran

If you’ve ever dreamed of being a sports commentator, it’s never been easier to get your voice out to the public, in a high-quality professional way.

A new company called SportsCastr is allowing amateurs the chance to get behind the mic, broadcast games and offer their own sports commentary. Using a mobile phone, the SportsCastr app uses technology with green screens and graphics to give a professional broadcasting look and feel.

“We’ve created essentially a studio in an app so you can be in your dorm room or you could be in the locker room, and with one click you’re live and we make you look great,” said Kevin April, CEO of SportsCastr.

It’s not just for amateurs. Professional athletes like New York Giants Safety Landon Collins are using SportsCastr to prepare for a media career after his playing years.

“I play in front 120,000 fans, but speaking in front of people I break down,” Collins said. “So it took it took a lot of me to do that especially in front of like random people.”

Collins, a 3-time Pro Bowl selection, says he’s given lots of thought to life after football, and he’d love to be on camera.

“My mom always said I was a handsome young man and I have a face for the camera … so that’s what I want my role to be,” said Collins who studied mass communications at the University of Alabama.

“We believe that location-based VR is the tip of the spear as it were for the entire VR industry. So you could be at home and be participating in any of the experiences in our VR locations with other people,” says Vaughn. With AMC as one of the company’s biggest backers, Dreamscape is betting that the synergy between Hollywood and virtual reality will help draw moviegoers. Dreamscape is part of a larger trend of startups building out physical retail VR locations. Disclosure: Comcast Ventures is

“We believe that location-based VR is the tip of the spear as it were for the entire VR industry. It will get people exposed to how unique this medium can be and also those of us who create it, we are learning the capability as well. It’s the first time that the technology has come together, not just the backpacks the headsets and the tracking, but even the physical optics in a way that we can really learn the vocabulary of this new medium,” Dreamscape CEO Bruce Vaughn told CNBC.

Vaughn says the company’s first move is to get venues opened in key locations, but he is already looking at the prospect of stepping into consumers’ homes.

“Being able to network people from the home is something we are very interested in. So you could be at home and be participating in any of the experiences in our VR locations with other people,” says Vaughn. “You can imagine there is a social aspect to that.”

With AMC as one of the company’s biggest backers, Dreamscape is betting that the synergy between Hollywood and virtual reality will help draw moviegoers. The company says some locations will be standalone locations, while others will be incorporated into AMC theaters.

Veteran film producer Walter Parkes, known for franchises such as “Men in Black,” co-founded Dreamscape with the hope that VR will become as popular as going to the movies.

“I think what’s happening in Hollywood right now, is that the studios sense there is something out there. They also sense there are many reasons for people not to go to movies at theaters: the ability to stream at home, how extraordinary the televisions and sound is. So they are very anxious not only to see VR succeed in and of itself, but also create more energy around places like this that sort of support the communal aspect of film going that is really at the essence of what we do in Hollywood,” Parkes told CNBC.

Dreamscape is part of a larger trend of startups building out physical retail VR locations. SPACES, backed by Comcast Ventures, recently opened a new “Terminator Salvation” VR experience at one of Southern California’s largest malls in Irvine. And The Void, which Disney invested in through its incubator program, is expanding to 17 locations this year, featuring a virtual Star Wars experience.

Disclosure: Comcast Ventures is part of Comcast, which is also the parent company of NBCUniversal and CNBC.

Europe’s tech start-up scene is giving Silicon Valley a run for its money. The research, released Tuesday at the Slush tech conference in Helsinki, Finland, suggests investors could reap big returns from Europe’s technology start-ups. By contrast, U.S. tech IPOs had average gains of 42 percent. “This year has been an incredible year for the European tech ecosystem,” Tom Wehmeier, partner and head of research at Atomico who authored the report, told CNBC. Sixty-two out of Europe’s 69 tech IPOs ha

Europe’s tech start-up scene is giving Silicon Valley a run for its money.

Europe is home to more than twice as many tech initial public offerings (IPOs) as the U.S. so far this year, while newly-listed European companies are outperforming their American counterparts, according to a report by venture capital firm Atomico.

The research, released Tuesday at the Slush tech conference in Helsinki, Finland, suggests investors could reap big returns from Europe’s technology start-ups. Citing data from the London Stock Exchange, it found 69 tech companies have gone public in Europe so far this year, compared to 28 in the U.S.

European tech companies that went public in 2018 saw their share price increase by an average of 222 percent. By contrast, U.S. tech IPOs had average gains of 42 percent.

“This year has been an incredible year for the European tech ecosystem,” Tom Wehmeier, partner and head of research at Atomico who authored the report, told CNBC.

The fourth annual report surveyed 5,000 respondents across Europe. It said one reason the continent outpaces the U.S. in the tech IPO market is that European exchanges are more supportive of smaller companies that want to go public. Sixty-two out of Europe’s 69 tech IPOs had a market cap below $1 billion.

More start-ups valued at $1 billion or more — so-called “unicorns” — are coming to China within the next five years, a J.P. Morgan Chase executive said on Wednesday. “We are very excited about the prospects for technology in China,” said Jing Ulrich, managing director and vice chairman for Asia Pacific at the investment banking giant. “I would say in the next three to five years, in some of these verticals, you will have a number of unicorns and super-unicorns emerging, and they should be very,

More start-ups valued at $1 billion or more — so-called “unicorns” — are coming to China within the next five years, a J.P. Morgan Chase executive said on Wednesday.

“We are very excited about the prospects for technology in China,” said Jing Ulrich, managing director and vice chairman for Asia Pacific at the investment banking giant.

In particular, China is “really leading the way globally” in the realms of artificial intelligence, “new-energy” vehicles and electronic payments, Ulrich said at CNBC’s East Tech West conference in the Nansha district of Guangzhou, China.

“I would say in the next three to five years, in some of these verticals, you will have a number of unicorns and super-unicorns emerging, and they should be very, very popular among investors globally,” Ulrich said.

Unicorns are commonly defined as start-ups valued at $1 billion or more.

The bosses of 30 European start-ups have called on politicians to reform rules around employee stock ownership to help them attract more talent and compete with their Silicon Valley counterparts. Chief executives from firms including TransferWise, Stripe, PayPal-owned iZettle and recently listed Farfetch co-signed an open letter urging lawmakers in the continent make changes to existing regulations on employee stock options. “Without delay, we call on legislators to fix the patchy, inconsistent

The bosses of 30 European start-ups have called on politicians to reform rules around employee stock ownership to help them attract more talent and compete with their Silicon Valley counterparts.

Chief executives from firms including TransferWise, Stripe, PayPal-owned iZettle and recently listed Farfetch co-signed an open letter urging lawmakers in the continent make changes to existing regulations on employee stock options.

“Without delay, we call on legislators to fix the patchy, inconsistent and often punitive rules that govern employee ownership,” they said in the letter Wednesday.

Employee stock options grant employees the ability to buy a specified number of shares of the company they work for at a certain price and at an agreed time.

According to U.S.-based venture capital firm Index Ventures, tech workers in the U.S. own twice as much equity in the companies they work for than their European counterparts.

The investment firm adds that there is an imbalance country-by-country, with the U.K. having the “most favourable” regulatory and tax conditions for start-ups when it comes to stock options and German and Spain being “most in need of change.”

East Tech West Day Two: Artificial intelligence and unicorn start-ups in China7 Hours AgoOn day two of CNBC’s East Tech West event in the Nansha district of Guangzhou, China, artificial intelligence dominated the conversation. CNBC’s Uptin Saiidi recaps the day.

Overstock plans to sell its decades-old retail business in the next few months to make way for a full-blown bet on blockchain. Shares of Overstock surged as much as 26 percent Friday but the stock is down 66 percent this year. Byrne founded Overstock in 1999 to sell goods like furniture and jewelry on the internet. He’s now betting the future of that brand on multiple blockchain start-ups through its fully owned subsidiary called Medici Ventures. “I don’t care whether tZero is losing $2 million

Overstock plans to sell its decades-old retail business in the next few months to make way for a full-blown bet on blockchain.

The previously announced sale plans could go through as soon as February, the company’s CEO told The Wall Street Journal in a report published Friday. Overstock founder and CEO Patrick Byrne — an ardent believer in the technology that underpins bitcoin and other cryptocurrencies — declined to name any of the potential buyers.

Shares of Overstock surged as much as 26 percent Friday but the stock is down 66 percent this year.

Byrne founded Overstock in 1999 to sell goods like furniture and jewelry on the internet. He’s now betting the future of that brand on multiple blockchain start-ups through its fully owned subsidiary called Medici Ventures.

The Salt Lake City-based company has invested $175 million in Medici, which has been burning money since its 2014 inception: It lost lost $39 million in the first three quarters of the year, and roughly $22 million last year, according to the company’s public filings. Overstock itself is in the red, with a net loss of $163 million in the first three quarters of this year.

One of its best-known start-ups, tZero, a trading system that hasn’t launched commercially, is also burning money.

Medici houses start-ups that go well beyond the scope of just cryptocurrencies. One company Voatz, runs blockchain-based voting through a smartphone app while another is working on digital property rights in Rwanda.

While Byrne told investors in a September shareholder letter that Overstock does not “have significant holdings of bitcoin,” the share price moves have been tightly correlated. During the cryptocurrency’s rise to nearly $20,000 last year, Overstock shares surged more than 400 percent from July through the end of 2018. After trading above $80 in January, the stock is down to just above $21 as of Friday afternoon.

Bitcoin itself was trading above $4,200 on Friday, down 78 percent since its high reached in December 2017.

Multiple Wall Street CEOs have denounced bitcoin as a scam or bubble, while Berkshire Hathaway’s Warren Buffett famously likened it to rat poison. But its underlying technology is more widely accepted among public companies. IBM, J.P. Morgan, Deloitte, Amazon and Facebook are among those implementing the technology in some way.

Still, skeptics abound on the blockchain side. Global economist Nouriel Roubini, one of the few who predicted the 2008 financial crisis, recently called the technology the most “over-hyped — and least useful — technology in human history.”